Chairman of the National Electric Power Regulatory Authority (Nepra), Waseem Mukhtar, has expressed support for over Rs60 billion in write-offs for K-Electric (KE). During a meeting at the Special Investment Facilitation Council (SIFC) aimed at resolving KE’s longstanding issues, Mukhtar noted that losses for government-owned distribution companies (Discos) are typically absorbed into the circular debt or recovered through consumer surcharges.
KE’s CEO, Syed Moonis Abdullah Alvi, outlined that extensive deliberations involving key stakeholders led to the Economic Coordination Committee (ECC) of the Cabinet approving several agreements to settle disputes between KE and the Government of Pakistan. These include the Power Purchase Agreement (PPA), Interconnection Agreement (ICA), Tariff Differential Subsidy (TDS) Agreement, and a Mediation Agreement.
Alvi highlighted that KE has filed for write-offs totaling Rs68 billion for claims from FY 2017 to FY 2023, which have been vetted by A F Ferguson, Chartered Accountants. However, Nepra has raised concerns about the lack of CNICs accompanying these claims.
Mukhtar assured that Nepra is actively evaluating KE’s write-off claims and aims to resolve the matter promptly. He also noted that similar recovery losses are prevalent among other government-owned Discos, where such losses are managed through circular debt or consumer surcharges.
Regarding the tariff post-2023, Alvi stated that KE’s Multi-Year Tariff (MYT) expired on June 30, 2023, and the company has submitted tariff petitions for the next control period to Nepra. Mukhtar assured that Nepra is expediting the tariff determination process for the period beyond June 2023.
Secretary Power, Rashid Langrial, shared details on KE’s Indicative Generation Plan (IGP), which includes several Thar coal-based projects as directed by the Prime Minister’s Office. These projects include conversions and new installations aimed at enhancing KE’s generation capacity.
The meeting also addressed government representation on KE’s Board of Directors. Secretary Power requested the substitution of Government of Pakistan board members in KE’s BoDs, unaffected by the Sindh High Court’s stay order.
Key decisions from the meeting include:
Nepra to resolve KE’s write-off claims and determine tariffs post-June 2023.
Approval of the conversion of JPCL Unit-I to 100% Thar Coal and power off-take by KE.
Assistance from KE to change Government of Pakistan board members in its BoDs.
Story by Mushtaq Ghumman
